Registering a Company or Sole Trader in Georgia: 2026 Guide

Setting up in Georgia is fast: a sole trader or LLC is registered at the Public Service Hall usually within one business day, and a foreigner can be the sole owner. For freelancers and small turnover there's the favourable small-business status at 1% of turnover.

Which form to choose

• Individual Entrepreneur (IE / sole trader) — the simplest; fits freelancers and small business; eligible for 1% small-business status.
• LLC — for partners, employees or limited liability.
• Special regimes — free industrial zones, IT status — for specific models.

For most self-employed movers the starting point is an IE plus small-business status. An LLC makes sense when there are partners, staff, or a need to protect personal assets.

Small-business status (1%)

An IE with annual turnover below the threshold (a common reference is GEL 500,000; confirm at rs.ge) can hold small-business status and pay 1% of turnover instead of 20% income tax; above the threshold the rate is higher. This is the main reason freelancers and remote workers register here: working for foreign clients, the legal burden comes out minimal.

The status has catches learned late. It's counted on turnover, not profit — the whole revenue matters, not what's left after costs. Some activities don't qualify — for instance consulting in some readings, and licensed fields — so check your exact activity in advance. And the status isn't granted automatically when you register the IE; you must request it separately, or you'll pay 20% instead of 1% all year.

VAT and when it kicks in

A separate topic newcomers miss: VAT. Above a set turnover threshold you must register for VAT — and it's a different threshold from the small-business one. While you're a small freelancer it's irrelevant, but as turnover grows VAT can "switch on" unnoticed, and penalties for late registration are real. Check current thresholds and rates at rs.ge; if turnover is nearing the line, that's the cue to bring in an accountant.

Documents

Passport (and translation if required); a legal address in Georgia (lease or owner consent); the application; for an LLC — charter and partner details. The address is verified — an empty one won't do.

Step by step

1. Choose the form and a name.
2. Prepare the address and documents.
3. File at the Public Service Hall — usually same day (a "same-hour" expedited tariff exists).
4. Get the extract and tax number.
5. Register on the Revenue Service portal (rs.ge); request small-business status if relevant.
6. Open a business account — see how to open a bank account.

Tax and reporting

A monthly turnover declaration is filed on rs.ge. A small IE's books are often self-kept; with staff or VAT, use an accountant — their fees in Georgia are modest.

How to pay tax, step by step

1. Through the month, record all revenue credited to the IE account.
2. By the set date next month, file the turnover declaration in your rs.ge account.
3. Pay the tax — 1% of turnover with small-business status — from the same portal.
4. Keep payment confirmations; the bank may ask for them when checking the source of funds.

Missing a month means a fine and interest, so put the declaration in your calendar as a recurring task.

Hiring staff

The moment you hire, payroll reporting is added: income tax is withheld from salaries, there are mandatory pension contributions, and it's all declared monthly. A solo IE has none of this, but the first employee complicates the accounting — here you almost always need an accountant. Contracts are drawn up in Georgian (or bilingual), and wording matters as much as in any official document.

Pausing and closing

Plans change, and a business sometimes needs pausing or closing. As long as the IE exists, the duty to file declarations remains — even with zero turnover you file "nil" returns, or penalties pile up. So if activity has stopped, it's better to close the IE officially than to abandon it. Closure goes through the tax service and the registry; settle debts and open periods before leaving the country. "Just stop using the account" is not the same as closing.

IT status and free zones

Some models have special regimes. IT companies may qualify for "international company" status or the virtual IT-zone regime with reduced rates — attractive for exporting IT services, but requiring criteria and a separate procedure. Free industrial zones (FIZ) give benefits to production and trade inside the zone. For a typical freelancer or consultant these are overkill — an IE with 1% status is enough — but a product IT company with a team should model a special regime in advance.

The cost of running an IE

Opening an IE is cheap, but it has running costs to budget from the start: the tax (1% of turnover under small-business status); bank servicing (account maintenance, transfer, withdrawal and conversion fees); accounting if you don't do it yourself; and possibly a legal address if you don't have one. All this still makes Georgia one of the most favourable jurisdictions for a freelancer, but "1% and that's it" is an oversimplification — count the real burden as tax plus servicing plus bookkeeping.

Common mistakes

• Setting up an LLC where an IE would do;
• forgetting to request small-business status and paying 20% for a year;
• underrating the real-address requirement;
• missing the monthly declaration and getting fined.